VCs Aren’t as Omniscient as We Think

August 14, 2014

12:00 pm

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When David Hornik finished his first day of work at August Capital, nearly 15 years ago, he thought, “I’m pretty sure I’m f***ed.”

Everyone was discussing microprocessors and systems and seemed to know what they were talking about – so he just pretended.

Ever since, Hornik has treated his VC job as a learning experience. Every year, he has about 100 one-hour meetings with startups, which amounts to 100 hours of “education.”

“Even the businesses I don’t think are interesting, you tell me something interesting,” Hornik said at a TCWEEK event in Vegas last week.

Asked what trends were hot, Hornik responded, “What do I know? . . . I actually don’t believe that I know anything. It’s not my job to know what the trends are, but it’s just my job to notice.”

That’s how he sees his job as an investor, too. He doesn’t necessarily know which startups are going to fail or succeed, but he tries to be as alert as possible to the signs.

“I always say to VCs, ‘If you are so smart, why don’t you start the company?’” said Hornik. “I am not that guy. I don’t know what the future holds. What I say is I’m going to meet amazing people and hear what they think is amazing and important, and I hope I recognize it.”

“If you are right 1 time in 10, you’re an amazing VC. If you’re right 1 time in 20, you’ll be employed as a venture capitalist for the rest of your life,” he added.

Even after funding a company, while Hornik and August Capital are very hands-on, they’re not going to be showering startups with their expertise.

“I don’t think it’s my job to tell you what to do. If I’m telling you what to do, I probably should bring someone else in,” said Hornik. “What the f*** do I know?”

That’s a lot more ignorance and humility than you might expect from a VC. But one thing Hornik isn’t humble about is his sense of humor.

“Is telling jokes in board meetings value add? Because then I’m killing it,” joked Hornik. “I hope so because then I’m like at least as good as everyone else.”

Tech Cocktail Week is a monthly retreat and mini-conference in downtown Vegas for founders, media, and investors to meet, learn, and be inspired from each other and their surroundings. Learn more here.

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Kira M. Newman is a Tech Cocktail writer interested in the harsh reality of entrepreneurship, work-life balance, and psychology. She is the founder of The Year of Happy and has been traveling around the world interviewing entrepreneurs in Asia, Europe, and North America since 2011. Follow her @kiramnewman or contact kira@tech.co.